a

GAO

United States General Accounting Office

Report to Congressional Requesters

May 2003 HUMAN CAPITAL

OPM Can Better Assist 

Agencies in Using 

Personnel Flexibilities 

GAO-03-428
OPM Has Taken Several Actions to Assist Agencies 

OPM has an important leadership role in identifying, developing, applying, 

and overseeing human capital flexibilities across the federal government. 

OPM has taken several actions to assist federal agencies in effectively using 

the human capital flexibilities that are currently available to agencies. For 

example, OPM has issued a handbook for agencies that identifies the various 

flexibilities available to help manage their human capital. Also, OPM has 

taken various actions to assist agencies in identifying additional flexibilities 

that might be helpful to agencies in managing their workforces. 

Human Resources Directors Gave Mixed Views on OPM’s Role 

To yield indications of the progress that OPM has made in its important role 

related to assisting agencies in the use of human capital flexibilities, GAO 

surveyed the human resources directors of the federal government’s 24 

largest departments and agencies in fall of 2001 and again in the fall of 2002. 

There was little change in the directors’ level of satisfaction with OPM’s role 

in assisting agencies in using available flexibilities, which remained mixed. 

For example, one director said OPM had effectively facilitated the use of 

work-life flexibilities, but others thought that OPM had placed its own 

restrictive interpretation on the use of other personnel flexibilities. The 

level of satisfaction with OPM’s role in identifying additional flexibilities was 

greater in 2002 than in 2001, but still remained below the satisfaction level 

for assistance with existing flexibilities. Several directors said that OPM had 

not worked diligently enough in supporting authorization of 

governmentwide use of new flexibilities that have been sufficiently tested 

and deemed successful. 

Additional OPM Actions Could Further Facilitate Use of 

Flexibilities 

Although OPM has recently taken numerous actions, OPM could more fully 

meet its leadership role to assist agencies in identifying, developing, and 

applying human capital flexibilities across the federal government. In its 

ongoing internal review of its existing regulations and guidance, OPM could 

more directly focus on determining the continued relevance and utility of its 

regulations and guidance by asking whether they provide the flexibility that 

agencies need in managing their workforces while also incorporating 

protections for employees. In addition, OPM can maximize its efforts to 

make human capital flexibilities and effective practices more widely known 

to agencies by compiling, analyzing, and sharing information about when, 

where, and how the broad range of flexibilities are being used, and should be 

used, to help agencies meet their human capital management needs. OPM 

also needs to more vigorously identify new flexibilities that would help 

agencies better manage their human capital and then work to build 

consensus for the legislative action needed. 

HUMAN CAPITAL

OPM Can Better Assist Agencies in Using 

Personnel Flexibilities 

www.gao.gov/cgi-bin/getrpt?GAO-03-428.

To view the full report, including the scope 

and methodology, click on the link above. 

For more information, contact J. Christopher 

Mihm at (202) 512-6806 or mihmj@gao.gov. 

Highlights of GAO-03-428, a report to 

Congressional Requesters 

May 2003

Congressional requesters asked 

GAO to provide information on 

actions that the Office of Personnel 

Management (OPM) has taken to 

facilitate the effective use of 

human capital flexibilities 

throughout the federal government 

and what additional actions OPM 

might take in this regard. These 

flexibilities represent the policies 

and practices that an agency has 

the authority to implement in 

managing its workforce. 

To better facilitate the effective use 

of human capital flexibilities 

throughout the federal government 

and consistent with OPM’s ongoing 

efforts in this regard, GAO 

recommends that the Director of 

OPM 

• review existing OPM regulations 

and guidance to determine 

whether they provide agencies 

with needed flexibility, 

• more thoroughly research, 

compile, and analyze information 

on the effective and innovative 

use of flexibilities, and 

• identify and build consensus for 

legislation to authorize new 

flexibilities that would help 

agencies better manage their 

human capital. 

OPM commented on a draft of this 

report and agreed with the 

conclusions and recommendations. 
Page i GAO-03-428 OPM's Role in Flexibilities

Contents

Letter 1

Results in Brief 2

Background 5

OPM Has Taken Several Actions to Assist Agencies in Using 

Flexibilities 10

Agencies’ Human Resources Directors Gave Mixed Views on OPM’s 

Role Related to Flexibilities 15

Additional OPM Actions Could Further Facilitate Agencies’ Use of 

Flexibilities 19

Conclusions 25

Recommendations for Executive Action 26

Agency Comments 27

Appendixes

Appendix I: Objectives, Scope, and Methodology 28

Appendix II: Comments from the Office of Personnel Management 31

Appendix III: GAO Contacts and Staff Acknowledgments 34

Table Table 1: Human Resources Directors’ Responses to GAO 

Questionnaire on Human Capital Flexibilities (Fall 2001 

and Fall 2002) 30

Figures Figure 1: Key Practices for Effective Use of Human Capital 

Flexibilities 9

Figure 2: Human Resources Directors’ Extent of Satisfaction with 

OPM’s Role in Helping Their Agencies Use Available 

Human Capital Flexibilities (Fall 2001 and Fall 2002) 16

Figure 3: Human Resources Directors’ Extent of Satisfaction with 

OPM’s Role in Helping Their Agencies Identify Additional 

Human Capital Flexibilities That Could Be Authorized 

(Fall 2001 and Fall 2002) 18
Contents

Page ii GAO-03-428 OPM's Role in Flexibilities

Abbreviations

CHCO chief human capital officer

DOJ Department of Justice

NAPA National Academy of Public Administration

OMB Office of Management and Budget

OPM Office of Personnel Management

This is a work of the U.S. Government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. It may contain copyrighted graphics, images or other materials. 

Permission from the copyright holder may be necessary should you wish to reproduce 

copyrighted materials separately from GAO’s product.
Page 1 GAO-03-428 OPM's Role in Flexibilities

United States General Accounting Office

Washington, D.C. 20548

A

May 9, 2003 Letr

The Honorable Joseph I. Lieberman

Ranking Minority Member

Committee on Governmental Affairs

United States Senate

The Honorable Daniel K. Akaka

Ranking Minority Member

Subcommittee on Financial Management, the 

Budget and International Security

Committee on Governmental Affairs

United States Senate

The Honorable George V. Voinovich

Chairman

The Honorable Richard J. Durbin

Ranking Minority Member

Subcommittee on Oversight of Government Management,

the Federal Workforce and the District of Columbia

Committee on Governmental Affairs

United States Senate

The Honorable Thad Cochran

United States Senate

To deal with the challenges that federal agencies are experiencing in 

acquiring and retaining staff to meet current and expected needs, agencies 

need effective human capital flexibilities—with appropriate safeguards—to 

assist them. In broad terms, human capital flexibilities represent the 

policies and practices that an agency has the authority to implement in 

managing its workforce to accomplish its mission and achieve its goals. 

These flexibilities can include actions related to recruitment, retention, 

compensation, position classification, incentive awards and recognition, 

training and development, performance management and appraisals, 

realignment and reorganization, and work arrangements and work-life 

policies. The tailored use of such flexibilities for acquiring, developing, and
Page 2 GAO-03-428 OPM's Role in Flexibilities

retaining talent is an important cornerstone of our model of strategic 

human capital management.1

 

As the federal government’s human capital agency, the Office of Personnel 

Management (OPM) has an important leadership role in identifying, 

developing, and applying human capital flexibilities across the federal 

government. Given the importance of OPM’s role, you asked us to provide 

information on the actions that OPM has taken to facilitate the effective use 

of human capital flexibilities throughout the federal government and what 

additional actions OPM might take in this regard. This report is the second 

of two reports responding to your request for information on the use of 

human capital flexibilities in the federal government. In December 2002, 

we reported on (1) the key practices that agencies should implement for 

effective use of human capital flexibilities and (2) agency and union 

officials’ views related to the use of human capital flexibilities.2

 In addition 

to the above addressees, both reports were also done at the request of the 

Honorable Fred Thompson, former ranking minority member of the Senate 

Committee on Governmental Affairs.

To address the issue of OPM’s role in facilitating agencies’ use of human 

capital flexibilities, we reviewed relevant reports and interviewed 

cognizant officials from OPM, the Merit Systems Protection Board, and the 

National Academy of Public Administration (NAPA). We also interviewed 

the individuals serving in the positions of human resources directors for 

the federal government’s 24 largest departments and agencies. We 

surveyed these 24 human resources directors in the fall of 2001 and 

surveyed the individuals in these positions again in the fall of 2002. In 

addition, we reviewed previous GAO reports on a broad range of human 

capital issues. We conducted our work in accordance with generally 

accepted government auditing standards. (See app. I for additional 

information on our objectives, scope, and methodology.)

Results in Brief OPM recognizes its important leadership role in assisting federal agencies 

in identifying, developing, and applying human capital flexibilities across 

1

U.S. General Accounting Office, A Model of Strategic Human Capital Management, GAO02-373SP (Washington, D.C.: Mar. 15, 2002).

2

U.S. General Accounting Office, Human Capital: Effective Use of Flexibilities Can Assist 

Agencies in Managing Their Workforces, GAO-03-2 (Washington, D.C.: Dec. 6, 2002).
Page 3 GAO-03-428 OPM's Role in Flexibilities

the federal government. As noted in its most recent strategic plan, OPM’s 

strategy in fulfilling its mission is to provide human resources management 

leadership and services for all agencies in a manner that blends and 

balances flexibility and consistency. OPM seeks to maintain consistency in 

the federal government’s human resources management systems for areas 

such as merit principles and accountability, while at the same time assist 

agencies to facilitate the effective use of available human capital 

flexibilities, as well as to identify and develop additional human capital 

flexibilities that could be authorized to help agencies manage their 

workforces.

OPM has several initiatives underway to assist federal agencies in 

effectively using the human capital flexibilities that are currently available 

to agencies. For example, OPM has issued a handbook3

 for agencies that 

identifies the various flexibilities available to help manage human capital 

and has several initiatives under way to address key personnel challenges 

in the area of hiring. OPM has also developed information on lessons 

learned for using human capital flexibilities and implementing change to 

improve federal human resources management. OPM has also committed 

the assistance of its various internal experts to serve as liaisons with 

agencies and to provide expedited services when needed, including 

assistance in the implementation of human capital flexibilities. 

Furthermore, OPM has reorganized its structure with the expectation that 

it will be able to better serve and respond to requests from agency 

customers and help ensure that all levels within OPM are supportive of 

agencies’ efforts to use flexibilities.4

OPM has also taken some actions to identify legislative options for 

additional flexibilities that might be helpful to agencies in managing their 

workforces. For example, OPM has suggested the broader application 

through legislation of various personnel flexibilities that have been tested 

and evaluated through pilot projects and alternative personnel systems 

over the past two decades. Also, OPM has been recently more active in 

supporting the passage of proposed legislation that would enhance the

3

U.S. Office of Personnel Management, Human Resources Flexibilities and Authorities in 

the Federal Government (Washington, D.C.: Updated July 25, 2001).

4

For additional information on OPM’s restructuring efforts see our report: Major 

Management Challenges and Program Risks: Office of Personnel Management (GAO-03-

115, January 2003).
Page 4 GAO-03-428 OPM's Role in Flexibilities

human capital flexibilities already available, including the governmentwide 

provisions in the Homeland Security Act of 2002.5

The views of human resources directors from across the federal 

government yield revealing indications of the progress that OPM has made 

in its important role related to assisting agencies in the use of human 

capital flexibilities. The human resources directors we surveyed in the fall 

of 2001 and again in the fall of 2002 gave mixed views on their satisfaction 

with OPM’s role in assisting agencies in using available flexibilities. One 

director we interviewed, for example, praised OPM for the positive actions 

it had taken in facilitating work-life programs for federal employees. On 

the other hand, several directors noted, for instance, that OPM often has 

placed its own restrictive interpretation on the use of personnel 

flexibilities, surrounding them with too many regulations that make the use 

of such flexibilities extremely complicated and more difficult than needed. 

The human resources directors were generally less satisfied with OPM’s 

role in identifying additional flexibilities that could be authorized for 

agencies to use in managing their workforces, although the level of 

satisfaction was greater in 2002 than in 2001. Several directors we 

interviewed said, for example, that although OPM had actively listened to 

agency officials’ views about their various needs for additional flexibilities, 

OPM had not worked diligently enough in supporting efforts to bring about 

governmentwide authorization and implementation of innovative human 

capital practices and flexibilities that have been sufficiently tested and 

deemed successful. 

Although OPM has recently taken numerous actions, OPM could take 

additional steps to assist agencies in identifying, developing, applying, and 

overseeing human capital flexibilities across the federal government. As 

part of its ongoing internal review of its existing regulations and guidance, 

OPM has focused chiefly on reviewing the clarity and readability of its 

regulations and guidance. OPM could more directly focus on determining 

the continued relevance and utility of its regulations and guidance by 

asking whether they provide the flexibility that agencies need in managing 

their workforces while also incorporating protections for employees. In 

addition, OPM could enhance its efforts to make human capital flexibilities 

and effective practices more widely known to agencies. Although OPM has 

made efforts to inform agencies of what flexibilities are generally available 

5

Pub. L. No. 107-296, Nov. 25, 2002.
Page 5 GAO-03-428 OPM's Role in Flexibilities

and why their use is important, OPM has yet to take full advantage of its 

ability to compile, analyze, and share information about when, where, and 

how the broad range of flexibilities are being used, and should be used, to 

help agencies meet their human capital management needs. It is also 

important for OPM to oversee the use of personnel flexibilities to ensure 

not only that the use of flexibilities are being maximized, but also, along 

with agencies, ensuring that flexibilities are being used consistent with the 

merit principles and other national goals and include appropriate 

safeguards. Finally, OPM could play a critical role in identifying and 

building a consensus for new flexibilities that would help agencies better 

manage their human capital. 

These additional OPM actions are consistent with OPM’s overall goal of 

aiding federal agencies in adopting human resources management systems 

that improve their ability to build successful, high-performance 

organizations. Because this role is critical to improved governmentwide 

strategic human capital management, this report contains 

recommendations to the Director of OPM for the more effective use of 

existing human capital flexibilities and for the identification of additional 

human capital flexibilities that might be needed within the federal 

government. 

OPM commented on a draft of this report and agreed with the conclusions 

and recommendations. OPM pointed out that in future studies that address 

OPM leadership issues, in addition to surveying agency human resource 

directors, we should also survey agency chief operating officers. OPM 

believed that the chief operating officers have the “best perspective and the 

widest array of information about recruitment and retention issues.” We 

agree that such future studies would benefit from the perspectives of chief 

operating officers. OPM’s complete comments are shown in appendix II.

Background In serving as the federal government’s human capital agency, OPM sees its 

role to be the President’s strategic advisor on human capital issues, to 

develop tools and provide support to agencies in their human capital 

transformation efforts, and to assist in making the federal government a 

high-performing workplace. As such, OPM, in conjunction with the Office 

of Management and Budget (OMB), is charged with leading the federal 

government’s strategic management of human capital initiative, one of five
Page 6 GAO-03-428 OPM's Role in Flexibilities

governmentwide initiatives of the President’s Management Agenda.6 In 

carrying out this effort, OPM’s strategy is to provide human resources 

management leadership and services to all agencies in a manner that 

blends and balances flexibility and consistency. As we noted in our recent 

report on OPM’s management challenges, OPM carries out its leadership 

role in a decentralized environment where both it and the agencies have 

shared responsibilities for addressing the human capital and related 

challenges facing the federal government.7

OPM’s role in aiding federal agencies represents a considerable challenge 

because federal managers have complained for years about the rigid and 

elaborate procedures required for federal personnel administration and 

have often expressed the need for more flexibility within a system that has 

traditionally been based on uniform rules. Reformers have long sought to 

decentralize the personnel system and simplify the rules, arguing that 

however well the system may have operated in the past, it is no longer 

suited to meet the needs of a changing and competitive world. In 1983, for 

example, NAPA published a report critical of excessive restrictions on 

federal managers, including constraints on their human resources 

decisions.8

 In response to these criticisms, OPM has, over time, 

decentralized and delegated many personnel decisions to the agencies and 

has encouraged agencies to use human capital flexibilities to help tailor 

their personnel approaches to accomplish their unique missions. Our 

strategic human capital management model also advocates that agencies 

craft a tailored approach to their use of available flexibilities by drawing on 

those flexibilities that are appropriate for their particular organizations and 

their mission accomplishment.9

 Because of this tailoring, the federal 

personnel system is becoming more varied, notwithstanding its often-cited 

characterization as a “single employer.” 

6

The President’s Management Agenda includes five governmentwide initiatives: the strategic 

management of human capital, competitive sourcing, improved financial performance, 

budget and performance integration, and expanded electronic government.

7

U.S. General Accounting Office, Major Management Challenges and Program Risks: 

Office of Personnel Management, GAO-03-115 (Washington, D.C.: January 2003).

8

National Academy of Public Administration, Revitalizing Federal Management: Managers 

and Their Overburdened Systems (Washington, D.C.: 1983).

9

GAO-02-373SP.
Page 7 GAO-03-428 OPM's Role in Flexibilities

The overall trend toward increased flexibility has revealed itself in a 

number of ways, including the efforts of some agencies to seek 

congressional approval to deviate from the personnel provisions of Title 5 

of the U.S. Code that have traditionally governed much of the federal 

government’s civil service system.10 As observed in a 1998 OPM report,11

federal agencies’ status relative to these Title 5 personnel requirements can 

be better understood by thinking of them on a continuum. On one end of 

the continuum are federal agencies that generally must follow Title 5 

personnel requirements. These agencies do not have the authority, for 

example, to establish their own pay systems. On the other end of the 

continuum are federal agencies that have more flexibility in that they are 

exempt from many Title 5 personnel requirements. For example, the 

Congress provided the Tennessee Valley Authority and the Federal Reserve 

Board with broad authority to set up their own personnel systems and 

procedures. This trend toward greater flexibility, in fact, has gained 

momentum to the extent that about half of federal civilian employees are 

now exempt from at least some of the personnel-related requirements of 

Title 5. For example, the Federal Aviation Administration, the Internal 

Revenue Service, and the new Department of Homeland Security have 

exemption from key Title 5 requirements. 

In addition to receiving congressional authorizations for exemptions from 

the personnel-related requirements of Title 5, other mechanisms are 

available to initiate human capital innovations and flexibilities within 

federal agencies. OPM has the authority to reassess and make changes to 

its existing regulations and guidance to supply agencies with additional 

flexibilities. Additionally, a federal agency can obtain authority from OPM 

to waive some existing federal human resources laws or regulations 

through an OPM-sponsored personnel demonstration project. The aim of 

these demonstration projects is to encourage experimentation in human 

resources management by allowing federal agencies to propose, develop, 

test, and evaluate changes to their own personnel systems. In some cases, 

Congress has allowed some agencies to implement alternatives that have 

10Title 5 laws (or requirements) refer to those personnel management laws, procedures, and 

associated functions generally applicable to federal employees. Most federal personnel 

laws governing topics such as classification, appointment, pay and benefits, and adverse 

action are contained in Title 5. Title 5 also contains laws unrelated to federal personnel 

issues, such as the Administrative Procedure Act and the Freedom of Information Act, that 

are also applicable to federal agencies.

11U.S. Office of Personnel Management, HRM Policies and Practices in Title 5-Exempt 

Organizations (Washington, D.C.: August 1998).
Page 8 GAO-03-428 OPM's Role in Flexibilities

been tested and deemed successful. For example, more flexible pay 

approaches that were tested within the Department of the Navy’s China 

Lake (California) demonstration project in the early 1980s were eventually 

adopted by other federal agencies such as the Department of Commerce’s 

National Institute of Standards and Technology. 

In December 2002, we reported on agency officials’ and union 

representatives’ views regarding various issues related to flexibilities. 

According to the agency officials and union representatives we 

interviewed, existing flexibilities that are most effective in managing the 

workforce are work-life policies and programs, such as alternative and 

flexible work schedules, transit subsidies, and child care assistance; 

monetary recruitment and retention incentives, such as recruitment 

bonuses and retention allowances; special hiring authorities, such as 

student employment and outstanding scholar programs; and incentive 

awards for notable job performance and contributions, such as cash and 

time-off awards. Agency and union officials also identified five categories 

of additional human capital flexibilities as most helpful if authorized for 

their agencies: (1) more flexible pay approaches, (2) greater flexibility to 

streamline and improve the federal hiring process, (3) increased flexibility 

in addressing employees’ poor job performance, (4) additional workforce 

restructuring options, and (5) expanded flexibility in acquiring and 

retaining temporary employees. Furthermore, we reported that the agency 

managers and supervisors and human resources officials we interviewed 

generally agreed that additional human capital flexibilities could be 

authorized and implemented in their agencies while also ensuring 

protection of employees’ rights. Union representatives, however, 

expressed mixed views on the ability of agencies to protect employee 

rights with the authorization and implementation of additional flexibilities. 

Specifically, several union representatives said that managers could more 

easily abuse their authority when implementing additional flexibilities, and 

that agency leaders often do not take appropriate actions in dealing with 

abusive managers.

Based on our interviews with human resources directors from across the 

federal government and our previous human capital work, we also reported 

on six key practices that agencies should implement to use human capital 

flexibilities effectively. Figure 1 identifies these key practices.
Page 9 GAO-03-428 OPM's Role in Flexibilities

Figure 1: Key Practices for Effective Use of Human Capital Flexibilities

Lastly, also in our December 2002 report, we noted that agency and union 

officials identified several significant reasons why agencies have not made 

greater use of the human capital flexibilities that are available to them. 

These reported barriers that have hampered agencies in maximizing their 

use of available flexibilities included: agencies’ weak strategic human 

capital planning and inadequate funding for using these flexibilities given 

competing priorities; managers’ and supervisors’ lack of awareness and 

knowledge of the flexibilities; managers’ and supervisors’ belief that 

approval processes to use specific flexibilities are often burdensome and 

time-consuming; and managers’ and supervisors’ concerns that employees 

will view the use of various flexibilities as inherently unfair, particularly 

given the common belief that all employees must be treated essentially the 

same regardless of job performance and agency needs. 
Page 10 GAO-03-428 OPM's Role in Flexibilities

As noted in our report, the recently enacted Homeland Security Act of 2002 

provided agencies with a number of additional flexibilities relating to 

governmentwide human capital management. For example, agencies will 

now be permitted to offer buyouts to their employees without the 

requirement to reduce their overall number of employees. The legislation 

also permits agencies to use a more flexible approach in the rating and 

ranking of job candidates (categorical rating) during the hiring and staffing 

process. The Act also created chief human capital officer (CHCO) 

positions for the largest federal departments and agencies, an interagency 

CHCO Council, and a requirement that agencies discuss their human 

capital approaches in their annual performance plans and reports under the 

Government Performance and Results Act.

OPM Has Taken 

Several Actions to 

Assist Agencies in 

Using Flexibilities 

OPM deems that its role related to human capital flexibilities is broader 

than merely articulating polices that federal agencies use in managing their 

workforces. OPM sees that it has an important leadership role in 

identifying, developing, and applying human capital flexibilities across the 

federal government. As such, OPM has several initiatives underway with 

the goal of assisting federal agencies in using available flexibilities and 

identifying additional flexibilities that might be beneficial for agencies. 

OPM Has Initiatives to 

Assist Agencies in Using 

Available Flexibilities

One of OPM’s primary functions related to assisting agencies in the use of 

human capital flexibilities is to serve as a clearinghouse for information 

through a variety of sources, including its Web site. For example, OPM 

prepared and posted on its Web site a handbook on personnel flexibilities 

generally available to federal agencies. This handbook, Human Resources 

Flexibilities and Authorities in the Federal Government, describes the 

flexibilities that agencies can use to manage their human capital challenges 

and provides information about the statutory and regulatory authorities for 

the specific flexibilities. OPM has also established Web-based 

clearinghouses of information on best practices in two areas of human 

resources management: employee performance management and 

accountability. OPM said that it has received positive feedback on these 

two Web-based clearinghouses and that many of OPM’s customers have 

said that the information has been useful to them in researching 

information and when redesigning human resources-related programs. 

OPM is also developing a Preferred Practices Guide that it said would 

highlight efficient and effective hiring practices using existing hiring 
Page 11 GAO-03-428 OPM's Role in Flexibilities

flexibilities. To assist in developing this guide, OPM in July 2002 asked 

federal human resources directors to share information with OPM about 

their improved results in areas related to hiring by using newly developed 

practices, strategies, and methods that could assist other agencies in 

addressing similar challenges. According to OPM, the contents of this Webbased document will likely parallel the steps of the federal hiring process 

and encompass areas such as workforce planning, recruitment, 

assessment, and retention. The guide is also expected to include actual 

examples of agency hiring practices, such as the Emerging Leaders 

Program, a 2-year career development intern program created by the 

Department of Health and Human Services, and the Recruitment “Timely 

Feedback” Executive Tool, a monthly reporting and accountability system 

for gauging progress on recruiting initiatives that was established at the 

Social Security Administration. This Preferred Practices Guide, which 

OPM plans to post on its Web site in early 2003, would complement other 

ongoing OPM hiring-related efforts to encourage agencies to (1) provide 

interested persons with timely and informed responses to questions about 

the federal recruiting process, (2) develop clear and understandable job 

announcements, and (3) provide job applicants with regular updates on the 

status of their applications as significant decisions are reached.

OPM has also issued a report entitled Demonstration Projects and 

Alternative Personnel Systems: HR Flexibilities and Lessons Learned, 

which contains lessons learned about implementing change to improve 

federal human capital management. According to OPM, these lessons 

learned are based on the testing of several personnel flexibilities in a wide 

variety of demonstration projects and alternative personnel systems at 

federal agencies over the past 20 years.12 OPM said that agency officials 

from the various projects collaborated with OPM staff in developing the 

report. The lessons learned in OPM’s report are similar to the key practices 

that we recently reported on for effectively using human capital 

flexibilities. 

OPM has also committed the assistance of its various experts to help 

agencies with human capital issues and challenges, including use of the 

various flexibilities available to agencies. OPM has established a human 

capital team of desk officers who serve as liaisons with agencies and who 

are to work closely with the agencies to help them in responding to the 

12U.S. Office of Personnel Management, Demonstration Projects and Alternative Personnel 

Systems: HR Flexibilities and Lessons Learned (Washington, D.C.: 2001).
Page 12 GAO-03-428 OPM's Role in Flexibilities

President’s Management Agenda. For some agencies with less planning 

and actions on strategic human capital management, these desk officers 

provide coaching and assistance and establish contacts with OPM’s 

program office experts. OPM said that when working with their assigned 

agency representatives, the desk officers take full advantage of all available 

OPM resources, including clearinghouse information, to help agencies 

identify available flexibilities. For example, OPM said that its desk officer 

for the Department of Education fielded an inquiry that led to on-site 

assistance in the planning and implementation of a demonstration project 

for that department. 

OPM has also formed “strike force teams,” created on an ad hoc basis, to 

provide expedited service to agencies with critical, time-sensitive human 

capital needs. These strike force teams are to serve a single focal point 

through which agencies can get assistance and advice on a wide range of 

topics and issues, including the implementation of human capital 

flexibilities. OPM has created strike force teams for several agencies, 

including the Department of Housing and Urban Development, the 

Department of Justice (DOJ), and the Transportation Security 

Administration. For example, at the request of the Assistant Attorney 

General, a strike force team worked with DOJ human resources staff to 

develop and present a briefing on human resource flexibilities for DOJ 

political appointees. OPM is also working jointly with the new Department 

of Homeland Security to prescribe regulations for the department’s human 

resources management system.

OPM also holds conferences, training sessions, and other meetings to share 

information with agency officials, including material on the availability of 

flexibilities. For example, OPM conducts an annual conference to provide 

federal managers and human resources practitioners with updates and 

other information about the federal compensation environment, including 

topics such as pay and leave administration, performance management, 

position classification, and efforts to improve the compensation tools 

available to support agency missions. As an example of its training 

function, OPM, in collaboration with OMB, presented a half day of training 

on personnel authorities available to agencies as part of transition training 

for new political appointees. OPM said that it also held one-on-one 

meetings with more than 30 agencies to discuss telework, learn about 

agency initiatives in this area, and find out how OPM can assist agencies in 

expanding telework opportunities.
Page 13 GAO-03-428 OPM's Role in Flexibilities

In addition, OPM has realigned its own organizational structure and 

workforce. OPM’s goal was to create a new, flexible structure that will “destovepipe” the agency; enable it to be more responsive to its primary 

customers, federal departments and agencies; and allow it to focus on the 

agency’s core mission. For example, OPM has decided to put its various 

program development offices under the control of one associate director 

and its product and services functions under another associate director to 

ensure that it appropriately and efficiently responds to its customers. 

Effective implementation of OPM’s latest organizational and workforce 

realignment will be crucial to maximizing its performance as the federal 

government’s human capital leader, assuring its own and other agencies’ 

accountability, and ultimately achieving its goals.

OPM Also Has Some 

Initiatives to Assist in 

Identifying Additional 

Flexibilities

OPM has furthermore initiated some efforts to assist agencies in identifying 

additional flexibilities that might be effective in helping the agencies 

manage their workforces. For example, OPM said that it has actively 

supported passage of proposed legislation that would enhance human 

capital flexibilities and provide more latitude for flexible implementing 

regulations. OPM told us, for example, that it developed and drafted a 

significant portion of the proposed Managerial Flexibility Act of 2001,13 a 

bill intended to give federal managers tools and flexibility in areas such as 

personnel, budgeting, and property management and disposal. This 

proposed legislation did not pass the 107th Congress, although several 

related provisions were included in the recently enacted Homeland 

Security Act of 2002. OPM officials told us that these legislative efforts 

should serve as evidence that OPM can and does identify areas where 

changes to statute would provide more flexibility to agencies. Moreover, 

one component of the proposed legislation, which was not enacted, 

includes streamlining the process for implementing demonstration projects 

and creating a mechanism to export tested innovations to other federal 

organizations. OPM believes that to get a better return on investment from 

years of demonstration project evaluations, a method should exist—short 

of separate legislation—for converting successfully tested alternative 

systems and flexibilities to permanent programs and for making them 

available to other agencies.

13S. 1612, 107th Cong., 1st sess.
Page 14 GAO-03-428 OPM's Role in Flexibilities

OPM has taken other actions to assist agencies in identifying additional 

flexibilities that they could use to manage their workforces. For example, 

in its HR Flexibilities and Lessons Learned report, OPM identified 

personnel flexibilities that have been tested and evaluated through 

demonstration projects or alternative personnel systems over the last 20 

years. OPM said that during the development of the Managerial Flexibility 

Act, the President’s Management Council requested information on existing 

flexibilities and that OPM created its report in response to that request in 

an effort to catalogue these flexibilities in one document. OPM said that 

some of the flexibilities catalogued in its report have been thoroughly 

tested over time in a variety of environments, while others have more 

limited agency applicability and thus have more limited data to show their 

success. Some of these flexibilities outlined in the report correspond to the 

types of flexibilities that agency and union officials told us could be 

beneficial for their agencies, such as broadbanded pay systems, categorical 

rating for hiring, and expanded probationary periods for new employees.14 

OPM recognizes that additional efforts are needed to address key 

personnel challenges within the federal workforce, particularly in the areas 

of pay and hiring. In April 2002, OPM released a report that presents the 

case for the need for reform of the white-collar federal pay system under 

which 1.2 million General Schedule federal employees are paid.15 Without 

recommending a specific solution, OPM’s report stresses the importance of 

developing a contemporary pay system that is more flexible, marketsensitive, and performance-oriented as well as a better tool for improving 

strategic human capital management. Also, OPM said that in the coming 

months it will identify additional projects and proposals that will address 

systemic problems associated with the hiring process. These additional 

initiatives will include deploying competency-based qualifications, 

improving entry-level hiring, and updating and modernizing exam scoring 

policy. According to OPM officials, as it moves forward on these pay and 

hiring initiatives, OPM will assess what additional flexibilities and tools 

might be needed for agencies as they look for ways to better manage their 

workforces.

14GAO-03-2.

15U.S. Office of Personnel Management, A Fresh Start for Federal Pay: The Case for 

Modernization (Washington, D.C.: April 2002).
Page 15 GAO-03-428 OPM's Role in Flexibilities

Agencies’ Human 

Resources Directors 

Gave Mixed Views on 

OPM’s Role Related to 

Flexibilities

Although federal agencies have the primary responsibility to maximize 

their use of human capital flexibilities, OPM also plays a key role in 

facilitating agencies’ use of existing flexibilities as well as identifying new 

personnel authorities that agencies might need in managing their 

workforces. The views of agencies’ human resources directors can help to 

provide indications of the progress that OPM has made in its important role 

related to human capital flexibilities. We therefore surveyed the human 

resources directors for the 24 largest departments and agencies in the 

federal government to obtain their views on OPM’s role related to 

flexibilities. 

Directors’ Views Varied on 

OPM’s Role Related to Using 

Available Flexibilities

In the surveys we conducted in the fall of 2001 and again in the fall of 2002, 

the human resources directors for the largest departments and agencies 

gave mixed views on their satisfaction with OPM’s role in assisting their 

agencies in using available human capital flexibilities. Figure 2 depicts the 

directors’ responses on this issue for both 2001 and 2002.16 In 2002, 7 of the 

24 responding directors said that they were satisfied to “little or no” or 

“some” extent regarding OPM’s role in assisting their agencies in using 

available flexibilities. Conversely, 7 of the 24 responding directors in 2002 

said that they were satisfied to a “great” or “very great” extent with OPM’s 

role in assisting their agencies with available flexibilities. Overall for 2002 

on this issue, the average satisfaction level of the human resource directors 

was unchanged between 2001 and 2002. Specifically, for 2002 our survey 

showed that for five agencies, the director’s level of satisfaction was 

greater than the level of satisfaction for that agency’s human resources 

director from the previous year; for five agencies, the directors’ level of 

satisfaction was less than the level of satisfaction for that agency’s human 

resources director from the previous year. 

16During the period between the 2001 and 2002 surveys, 16 of the 24 individuals serving in 

the positions of human resources directors had changed.
Page 16 GAO-03-428 OPM's Role in Flexibilities

Figure 2: Human Resources Directors’ Extent of Satisfaction with OPM’s Role in 

Helping Their Agencies Use Available Human Capital Flexibilities (Fall 2001 and Fall 

2002)

In our interviews with the human resources directors regarding the issue of 

OPM’s role in assisting agencies in the use of available flexibilities, several 

of the directors said that OPM communicates well with agencies through emails, meetings, workgroups, and its Web site and has taken some action to 

disseminate information about existing flexibilities. One director, for 

example, commended OPM for effectively using its Web site to share 

information about what flexibilities are generally available to agencies. 

Another director praised OPM for the positive actions it had taken with 

respect to facilitating work-life programs for federal employees. However, 

directors frequently commented that OPM often puts its own restrictive 

interpretation on the use of flexibilities, surrounding them with too many 

regulations that can make their use unduly complicated and more difficult; 

regulations and guidance on implementing the Federal Career Intern 

Program were mentioned frequently in this regard, for example. Several 

directors argued that their agencies should be able to implement human 

capital flexibilities in the most flexible fashion, not the most restrictive. 

Little or no extent

Some extent

Moderate extent

Very great extent

No basis to judge/NA

Great extent

Number

Question: To what extent are you satisfied with the role that OPM 

has played in helping your department/agency use these 

available human capital flexibilities?

Source: Federal human resources directors’ responses to GAO questionnaire.

0

4

10

2

0 0

2

7

4

8 8

6

9

7

3

2

1

2001

2002

5
Page 17 GAO-03-428 OPM's Role in Flexibilities

One director expressed the opinion that, although the upper management 

of OPM may support using flexibilities, middle management and lowerlevel staff within the agency seemed resistant to change and sometimes 

hampered the efforts of agencies in the use of flexibilities. This director 

wanted to see OPM play a more facilitative and consultative role, working 

in concert with agencies. In addition, directors from several agencies 

stated that OPM needs to host additional forums to share experiences on 

the use of existing human capital flexibilities, with OPM more fully serving 

as a clearinghouse in making flexibilities and effective practices more 

widely known to agencies.

Directors Were Somewhat 

Less Satisfied with OPM’s 

Role Related to Identifying 

Additional Flexibilities

While the human resources directors we surveyed gave mixed views on 

their satisfaction with OPM’s role related to available flexibilities, the 

directors were less satisfied with OPM’s role in assisting agencies in 

identifying additional human capital flexibilities that could be authorized. 

However, the directors’ extent of satisfaction on this issue, as measured in 

our survey, was greater in 2002 than in 2001. Figure 3 depicts the directors’ 

responses on this issue for both 2001 and 2002. In 2002, 11 of the 24 

responding directors said that they were satisfied to “little or no” or “some” 

extent regarding OPM’s role in identifying additional flexibilities that could 

be authorized for agencies. Conversely, 6 of the 24 responding directors 

said that they were satisfied to a “great” or “very great” extent regarding 

OPM’s role in identifying additional flexibilities. For seven agencies, the 

director’s level of satisfaction was greater in 2002 than the level of 

satisfaction for that agency’s human resources director from the previous 

year; for four agencies, the director’s level of satisfaction was less than the 

level of satisfaction for that agency’s human resources director from the 

previous year. 
Page 18 GAO-03-428 OPM's Role in Flexibilities

Figure 3: Human Resources Directors’ Extent of Satisfaction with OPM’s Role in 

Helping Their Agencies Identify Additional Human Capital Flexibilities That Could Be 

Authorized (Fall 2001 and Fall 2002)

One human resources director we interviewed said, for example, that OPM 

has done a commendable job of listening to agencies’ concerns about the 

need for additional flexibilities, particularly through the Human Resources 

Management Council, an interagency organization of federal human 

resources directors.17 However, several directors said that OPM needs to 

play a more active role in identifying flexibilities that agencies might use to 

manage their workforces. Several human resources directors said that 

OPM should be doing more to conduct or coordinate personnel 

management research on additional flexibilities that might prove effective 

for agencies to use in managing their workforces. Several of these 

directors also told us that OPM should work more diligently to support 

17The recently enacted Homeland Security Act of 2002 establishes an Interagency Chief 

Human Capital Officer Council, which could replace the Human Resources Management 

Council.

Little or no extent

Some extent

Moderate extent

Very great extent

No basis to judge/NA

Great extent

Number 

Question: To what extent are you satisfied with the role that OPM 

has played in helping your department/agency identify additional 

human capital flexibilities that could be authorized?

Source: Federal human resources directors’ responses to GAO questionnaire.

0

4

10

2

3

0

5

9

6

4

6

8

6

4

3

2

3 3

2001

2002
Page 19 GAO-03-428 OPM's Role in Flexibilities

efforts in authorizing and implementing governmentwide those innovative 

human capital practices and flexibilities that have been sufficiently tested 

and deemed to be successful, such as those tested in OPM-sponsored 

personnel demonstration projects. 

According to many of the human resources directors we interviewed, OPM 

needs to play a larger role in acting as a change agent to get human capital 

legislation passed and implemented. While recognizing that OPM cannot 

promote legislation that is inconsistent with the administration’s views of 

the civil service, human resources directors said that OPM should be the 

policy leader in the area of human capital and, as the leader, should push 

harder for major civil service reform. In the human resources directors’ 

opinions, OPM needs to look at personnel reforms in a new, open, and 

objective way and develop changes to current laws and regulations to 

ensure that agencies can effectively obtain and manage their workforces. 

In addition, some directors expressed frustration about the lack of 

coordination between OPM and OMB in responding to OMB’s request for 

agencies to complete workforce planning and restructuring analyses.18 

Further, they said that OPM, OMB, and Congress need better 

communication and coordination in developing budgets and recognizing 

the costs involved in using human capital flexibilities.

Additional OPM 

Actions Could Further 

Facilitate Agencies’ 

Use of Flexibilities

Assisting federal agencies in using available flexibilities and in identifying 

additional flexibilities is an important part of OPM’s overall goal of aiding 

agencies in adopting human resources management systems that improve 

their ability to build successful, high-performance organizations. In 

testimony before Congress in February of 2001, we suggested two areas in 

which OPM could make substantial additional contributions in addressing 

the federal government’s human capital challenges.19 The first was in 

reviewing existing OPM regulations and guidance to determine their 

continued relevance and utility by asking whether they provide agencies 

with the flexibilities they need while incorporating protections for 

employees. The second area was in making existing human capital 

flexibilities and effective practices more widely known to the agencies, and 

in taking fullest advantage of OPM’s ability to facilitate information-sharing 

18This requirement for workforce planning and restructuring analyses is contained in OMB 

Bulletin No. 01-07, dated May 8, 2001.

19GAO-01-357T. 
Page 20 GAO-03-428 OPM's Role in Flexibilities

and outreach to human capital managers throughout the federal 

government. Although OPM has taken concerted action in some areas to 

assist agencies in using flexibilities, OPM has taken limited actions related 

to these two areas. Moreover, OPM could do more to assist agencies in 

identifying additional human capital flexibilities that could be authorized 

and also be actively working to build consensus to support related 

legislation that might be needed. Greater attention to these areas could 

allow OPM to more fully fulfill its leadership role to assist agencies in 

identifying, developing, and applying human capital flexibilities across the 

federal government. As we noted in the previous testimony, as OPM 

continues to move from “rules to tools,” its more valuable contributions in 

the future will come less from traditional compliance activities than from 

its initiatives as a strategic partner to agencies.

OPM’s Review of 

Regulations Could Provide 

Opportunity to Give 

Additional Flexibility to 

Agencies

Just as agencies need to streamline and improve their own internal 

administrative processes to effectively use flexibilities, OPM similarly 

needs to ensure that its regulations and guidance provide adequate 

flexibility while also recognizing the importance of ensuring fairness and 

incorporating employee protections. As we noted in our December 2002 

report, if senior managers within agencies want supervisors to make 

effective use of flexibilities, supervisors must view agencies’ internal 

processes to use the flexibility worth their time compared to the expected 

benefit to be gained in implementing the flexibility. Similarly, if OPM wants 

agencies to make effective use of flexibilities, agencies must view OPM’s 

regulatory requirements for using the flexibility worth the expected 

benefits that the flexibility would provide. 

In comments that it provided in response to our December 2002 report, 

OPM said that it is undertaking a review of its regulations and guidance. 

According to OPM, the purpose of this regulatory review, which began in 

December 2001, is to restate regulations in plainer language wherever 

possible to eliminate redundant or obsolete material and to revise 

regulations to make them more easily usable by a variety of readers. OPM 

said that because it has focused chiefly on making the regulations as 

readable as possible, rather than making substantive changes, the agency 

did not anticipate making changes to provide additional flexibility as part 

of this effort. OPM said that its Office of General Counsel, which is leading 

the regulatory review, has been carrying it out by working with OPM’s 

program offices to establish basic protocols, selecting provisions that 

require elimination or redrafting, soliciting drafts from the offices, and then 

reviewing and revising these drafts in conjunction with the OPM program 
Page 21 GAO-03-428 OPM's Role in Flexibilities

staff. OPM said that it amends its regulations to provide flexibility, on an 

as-needed basis, in the ordinary course of carrying out the OPM Director’s 

policies. 

In response to our request for examples of regulations that it has redrafted 

under this effort, OPM said it was reviewing all of the regulations in chapter 

I of Title 5 of the U.S. Code of Federal Regulations but that it was not yet in 

a position to supply examples because it had recently begun to submit 

some of the redrafted material to OMB for clearance. Nonetheless, a report 

we recently issued included an example of where OPM revised regulations 

to, at least in part, provide additional flexibility to agencies.20 In the fall of 

2000, OPM amended regulations on evaluating the job performance of 

senior executives within the federal government. OPM’s goal in developing 

these regulations was to help agencies hold their senior executives 

accountable by increasing agency flexibility, focusing on results, 

emphasizing accountability, and improving links between pay and 

performance. These changes were to balance the agencies’ desire for 

maximum flexibility with the need for a corporate approach that 

safeguards merit principles. OPM’s changes to the regulations included 

paring back many of the previous requirements to those in statute to give 

agencies more flexibility to tailor their performance management systems 

to their unique mission requirements and organizational cultures. OPM 

made these regulatory changes in part because performance management 

systems have tended to focus on process over results. 

Because providing additional flexibility has not been a fundamental 

purpose of its current regulatory review, OPM is not taking advantage of a 

crucial opportunity to provide additional flexibility, where appropriate, on 

a systematic basis rather than through a piece-meal, ad hoc approach. 

Human resources directors we interviewed often said that OPM should 

provide agencies with greater delegation to carry out their human capital 

programs. For example, some directors commented that agencies should 

be able to waive the annuity offsets for reemployed annuitants without 

authority by OPM.21 Some directors also told us that OPM should allow

20U.S. General Accounting Office, Results-Oriented Cultures: Using Balanced Expectations 

to Manage Senior Executive Performance, GAO-02-966 (Washington, D.C.: Sept. 27, 2002).

21Unless waived by OPM or an agency pursuant to a grant of authority by OPM, an amount 

equal to the annuity will be deducted from the reemployed annuitant's salary when the 

federal civilian retiree is reemployed. See 5 U.S.C. 8344 and 8468 and 5 CFR part 553.
Page 22 GAO-03-428 OPM's Role in Flexibilities

agencies to extend the probationary periods for newly hired employees 

beyond the standard 1-year period.22 Directors also said that OPM’s 

guidance for implementing human capital programs could sometimes be 

overly restrictive and burdensome. For example, some directors said that 

OPM’s internal approval and evaluation processes for personnel 

demonstration projects needed to be streamlined to make the program 

more practical.23 One director told us, for instance, that her agency had 

considered applying as a demonstration project but demurred because 

officials at her agency viewed OPM’s requirements as too burdensome. 

It is important to note that human resources directors we interviewed also 

expressed interest in gaining increased flexibilities that would require 

changes in federal statute and thus are outside of OPM’s authority to 

change independently. Directors commented on such areas as decreasing 

some of the limitations and parameters of allowable personnel 

demonstration projects. As we noted in recent testimony, OMB and the 

Congress have key roles in improving human capital management 

governmentwide, including the important responsibility of determining the 

scope and appropriateness of additional human capital flexibilities 

agencies may seek through legislation.24 In recent testimony on using 

strategic human capital management to drive transformational change, we 

noted the potential benefits of providing additional flexibility in the 

government’s personnel systems by suggesting, for example, that the 

Congress may wish to explore the benefits of allowing agencies to apply to 

OPM on a case-by-case basis (i.e., case exemptions) for authority to 

establish more flexible pay systems for certain critical occupations or, even 

more broadly, allowing OPM to grant governmentwide authority for all 

agencies (i.e., class exemptions) to use more flexible pay systems for their 

critical occupations.25 

22See 5 CFR 315, Subpart H.

23Guidance on developing, implementing, and evaluating an OPM-sponsored personnel 

demonstration project can be found in OPM’s Demonstration Projects Handbook and OPM’s 

Demonstration Projects Evaluation Handbook.

24U.S. General Accounting Office, Human Capital: Meeting the Governmentwide HighRisk Challenge, GAO-01-357T (Washington, D.C.: Feb. 1, 2001).

25U.S. General Accounting Office, Managing For Results: Using Strategic Human Capital 

Management to Drive Transformational Change, GAO-02-940T (Washington, D.C.: July 15, 

2002).
Page 23 GAO-03-428 OPM's Role in Flexibilities

A More Comprehensive 

Clearinghouse and 

Increased Information 

Sharing about Flexibilities 

Could Better Assist 

Agencies

In our December 2002 report on human capital flexibilities, we noted that 

one of the key factors for effectively using flexibilities is educating agency 

managers and employees on the availability of these flexibilities as well as 

about the situations where the use of those flexibilities is most appropriate. 

Ultimately the flexibilities within the personnel system are only beneficial 

if the managers and supervisors who would carry them out are aware of not 

only their existence but also the best manner in which they could be used. 

With a comprehensive clearinghouse and broad information sharing about 

flexibilities, OPM can greatly assist agencies in educating their managers 

and supervisors as well as preparing their human capital managers for their 

consultative role regarding the best manner in which the full range of 

flexibilities should be implemented.26 This information would also be 

useful to support OPM’s oversight of agencies’ use of personnel 

flexibilities.

OPM has not, however, fully maximized its efforts to make human capital 

flexibilities and effective practices more widely known to agencies. 

Although OPM has made efforts to inform agencies of what flexibilities are 

generally available and why their use is important, OPM has yet to take full 

advantage of its ability to compile, analyze, and distribute information 

about when, where, and how the broad range of flexibilities are being used, 

and should be used, to help agencies meet their human capital management 

needs. Human resources directors we interviewed frequently brought up 

that OPM needs to take further determined action on this issue. One 

human resources director said, for example, that OPM should be setting 

benchmarks and identifying best practices for using flexibilities. Another 

director added that OPM should provide agencies with different scenarios 

of how flexibilities can be used. Another director commented that OPM 

needs to develop more educational and training aids to inform agency 

officials about these best practices. Yet another director added that OPM 

should evaluate the effectiveness of many different flexibilities and share 

the results with other agencies. 

OPM officials told us that they do not generally know which federal 

agencies have done effective jobs in using specific flexibilities nor which 

practices these agencies employed to produce effective results. OPM could 

26We discussed agency actions to shift their human capital offices from primarily 

compliance activities to consulting activities in our report: Human Capital: Selected Agency 

Actions to Integrate Human Capital Approaches to Attain Mission Results (GAO-03-446, 

April 2003).
Page 24 GAO-03-428 OPM's Role in Flexibilities

use its outreach and information-sharing efforts to more thoroughly 

identify which federal agencies are specifically using the various 

flexibilities in effective ways and reporting on the particular practices that 

these agencies are using to implement their flexibilities. Examination of 

information from OPM’s database of federal civilian employees, the Central 

Personnel Data File, could help OPM in such analysis, including identifying 

possible correlations between an agency’s use of flexibilities and factors 

such as employees’ occupations, grade levels, and duty stations. This 

compilation, analysis, and distribution of information could also include 

research OPM conducts or sponsors that may shed light on effective 

practices for implementing existing flexibilities. 

OPM could also use this analysis of agencies’ use of flexibilities in its 

oversight role. OPM’s new Human Capital Assessment and Accountability 

Framework provides guidance for agencies to maximize their human 

capital management and is being used by OPM to evaluate agencies’ 

progress. For example, under one of the framework’s six standards for 

success,27 key questions to consider include the following:

• Does the agency use flexible compensation strategies to attract and 

retain quality employees who possess mission-critical competencies?

• Does the agency provide work/life flexibilities, facilities, services, and 

programs to make the agency an attractive place to work? 

The information gathered on personnel flexibilities could assist OPM in its 

assessment of this standard. In addition, OPM has the responsibility to not 

only review whether agencies are maximizing the use of personnel 

flexibilities, but also, along with agencies, ensure that flexibilities are being 

used fairly and are consistent with the merit principles and other national 

goals and include appropriate safeguards. 

27The six human capital standards for success in OPM’s Human Capital Assessment and 

Accountability Framework are strategic alignment, workforce planning and deployment, 

leadership and knowledge management, results-oriented performance culture, talent, and 

accountability.
Page 25 GAO-03-428 OPM's Role in Flexibilities

Additional Efforts to 

Identify New Flexibilities 

Needed

The human resource directors we interviewed said that OPM could do 

more to assist agencies in identifying additional human capital flexibilities 

that could be authorized. The information gathered on agencies’ use of 

flexibilities could also be used to gain greater insight into agencies’ needs 

related to additional flexibilities that might be helpful for agencies’ 

management of their human capital. In our discussions with OPM about its 

efforts in assisting agencies with flexibilities, OPM officials told us that it 

was not feasible to identify or track all agency requests for additional 

flexibilities because such requests are received throughout the 

organization and range from casual questions to formal requests for 

exceptions or demonstration projects. Tracking such requests, however, 

could assist OPM in gaining a clearer picture of agency concerns and 

requests for additional tools and flexibilities as well as more 

comprehensively documenting agency needs for the benefit of 

policymakers as statutory and regulatory changes are proposed and 

considered. The recently legislated Chief Human Capital Officers Council, 

chaired by the OPM Director, could also aid in disseminating information 

about effective human capital practices. We have reported that the use of 

the similar interagency councils of chief financial officers and chief 

information officers to, among other things, share information about 

effective practices, was one of the major positive public management 

developments over the past decade.28

Once OPM determines that additional flexibilities are needed, it could 

actively work to build consensus to support needed legislation. As noted 

earlier, OPM actively supported legislation in the last Congress to authorize 

additional flexibilities to agencies. Specifically, OPM drafted and 

supported a significant portion of the proposed Managerial Flexibility Act 

of 2001. OPM could continue to support such legislation and identify 

additional personnel flexibilities that are needed. 

Conclusions The ineffective use of flexibilities can significantly hinder the ability of 

federal agencies to recruit, hire, retain, and manage their human capital. To 

deal with their human capital challenges, it is important for agencies to 

assess and determine which human capital flexibilities are the most 

appropriate and effective for managing their workforces. As we previously 

28U.S. General Accounting Office, Government Management: Observations on OMB’s 

Management Leadership Efforts, GAO/T-GGD/AIMD-99-65 (Washington, D.C.: Feb. 4, 1999).
Page 26 GAO-03-428 OPM's Role in Flexibilities

reported, to ensure more effective use of human capital flexibilities, it is 

important that agencies (1) plan strategically and make targeted 

investments, (2) ensure stakeholder input in developing policies and 

procedures, (3) educate managers and employees on the availability and 

use of flexibilities, (4) streamline and improve administrative processes, 

(5) build accountability into their systems, and (6) change their 

organizational cultures. By more effectively using flexibilities, agencies 

would be in a better position to manage their workforces, assure 

accountability, and transform their cultures to address current and 

emerging demands. 

OPM provides the necessary link to agencies to accomplish their goals by 

making existing human capital flexibilities more widely known and easier 

to use and by identifying additional flexibilities that can help agencies 

better manage their workforces. While it has taken some actions to inform 

agencies about what flexibilities are generally available and why their use 

is important, OPM has significant opportunities to strengthen its role as its 

moves forward to assist agencies as an integral part of the administration’s 

human capital transformation efforts. By taking hold of these 

opportunities, OPM could more successfully aid agencies with more 

comprehensive information about the tools and authorities available to 

them for managing their workforce and the most effective ways that these 

flexibilities can be implemented. The new CHCO Council could be an 

excellent vehicle to assist in these areas.

Recommendations for 

Executive Action

Given the importance of the effective use of flexibilities as a critical part of 

improved human capital management within the federal government and 

consistent with OPM’s ongoing efforts in this regard, we recommend that 

the Director of OPM take the following actions. 

• Review existing OPM regulations and guidance to determine whether 

they provide agencies with needed flexibility while also incorporating 

protection for employees.

• Work with and through the new Chief Human Capital Officers Council to 

more thoroughly research, compile, and analyze information on the 

effective and innovative use of human capital flexibilities and more fully 

serve as a clearinghouse in sharing and distributing information about 

when, where, and how the broad range of flexibilities are being used, 

and should be used, to help agencies meet their human capital 

management needs.
Page 27 GAO-03-428 OPM's Role in Flexibilities

• Continue to identify additional personnel flexibilities needed to better 

manage the federal workforce and then develop and build consensus for 

needed legislation.

Agency Comments OPM commented on a draft of this report and agreed with the conclusions 

and recommendations. OPM pointed out that in future studies that address 

OPM leadership issues, in addition to surveying agency human resource 

directors, we should also survey agency chief operating officers. OPM 

believed that the chief operating officers have the “best perspective and the 

widest array of information about recruitment and retention issues.” We 

agree that such future studies would benefit from the perspectives of chief 

operating officers. OPM’s complete comments are shown in appendix II.

As agreed with your offices, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days from its 

date. At that time, we will send copies to the Chairman, Senate Committee 

on Governmental Affairs, and the Chairman and Ranking Minority Member, 

House Committee on Government Reform, and other interested 

congressional parties. We will also send copies to the Director of OPM. We 

also will make copies available to others upon request. In addition, the 

report will be available at no charge on the GAO Web site at 

http://www.gao.gov.

If you have any questions about this report, please contact me on (202) 512-

6806. Key contributors to this report are listed in appendix III. 

J. Christopher Mihm

Director, Strategic Issues
Page 28 GAO-03-428 OPM's Role in Flexibilities

Appendix I

Objectives, Scope, and Methodology AAppenednxidexiIs

This report is the second of two reports responding to a request from the 

Senate Committee on Governmental Affairs and two of its subcommittees 

regarding the use of human capital flexibilities in managing agency 

workforces. The objectives of our first report, issued in December 2002, 

were to provide information on (1) actions that federal agencies can take to 

more effectively implement human capital flexibilities and (2) agency and 

union officials’ views related to the use of human capital flexibilities.1

 The 

objectives of this report were to provide information on actions that the 

Office of Personnel Management (OPM) has taken to facilitate the effective 

use of human capital flexibilities throughout the federal government as 

well as what additional actions OPM might take in this regard. Our work in 

responding to this request was conducted in two phases. Phase one of our 

work primarily involved surveying and interviewing the human resources 

directors from the 24 largest departments and agencies. Phase two of our 

work involved conducting semi-structured interviews with managers and 

supervisors, human resources officials, and local union representatives 

from seven federal agencies we selected for more detailed review.2

 This 

report was developed primarily from our work during phase one. 

To respond to the objectives of this report, we gathered information from a 

variety of sources using several different data collection techniques. 

During phase one of our work, we interviewed representatives from OPM, 

the federal government’s human resources agency; Merit Systems 

Protection Board, a federal agency that hears and decides civil service 

cases, reviews OPM regulations, and conducts studies of the federal 

government’s merit systems; and the National Academy of Public 

Administration, an independent, nonpartisan, nonprofit, congressionally 

chartered organization that assists federal, state, and local governments in 

improving their performance. We interviewed representatives of these 

three organizations to gather background information on the federal 

government’s experiences with and use of human capital flexibilities and 

OPM’s role in assisting agencies in their use of personnel flexibilities. We 

also reviewed numerous reports issued by these organizations on 

governmentwide human capital issues, the use of various human capital 

1

U.S. General Accounting Office, Human Capital: Effective Use of Flexibilities Can Assist 

Agencies in Managing Their Workforces, GAO-03-2 (Washington, D.C.: Dec. 6, 2002).

2

 The seven agencies were the Department of the Air Force, General Services 

Administration, Internal Revenue Service, International Trade Administration, U.S. Mint, 

Department of State, and Veterans Benefits Administration.
Appendix I

Objectives, Scope, and Methodology

Page 29 GAO-03-428 OPM's Role in Flexibilities

flexibilities in federal agencies, and the role of OPM. In addition, we 

reviewed previous GAO reports on a broad range of human capital issues.

In the fall of 2001, we also gathered information for our objectives by 

conducting semistructured interviews with the human resources directors 

of the 24 largest federal departments and agencies. To produce a general 

summary of the human resources directors’ views, we first reviewed their 

responses to the open-ended questions we had posed to them. Based on 

our analysis of those responses, we identified a set of recurring themes and 

then classified each director’s responses in accord with these recurring 

themes. At least two staff reviewers collectively coded the responses from 

each of the 24 interviews and the coding was verified when entered into a 

database we created for our analysis. In addition, prior to our interviews 

with the 24 human resources directors, each of the 24 officials completed a 

survey of seven closed-ended questions dealing with agencies’ use of 

human capital flexibilities, OPM’s role related to these flexibilities, and the 

federal hiring process. 

To update this information, we resurveyed the 24 individuals serving in the 

agencies’ human resources director positions in the fall of 2002, asking the 

same seven questions. During the period between the 2001 and 2002 

surveys, 16 of the 24 individuals serving in the positions of human 

resources directors had changed. Table 1 shows the questions from these 

surveys along with a summary of the answers provided. For each item, 

respondents were to indicate the strength of their perception on a 5-point 

scale, from “little or no extent” to “very great extent.”

Our audit work on both phases of our review was done from May 2001 

through November 2002. We conducted our audit work in accordance with 

generally accepted government auditing standards.
Appendix I

Objectives, Scope, and Methodology

Page 30 GAO-03-428 OPM's Role in Flexibilities

Table 1: Human Resources Directors’ Responses to GAO Questionnaire on Human Capital Flexibilities (Fall 2001 and Fall 2002)

Source: GAO survey data.

Note: For the Fall 2001 and Fall 2002 surveys, N=24.

 

Little or 

no extent

Some

extent

Moderate 

extent

Great

extent

Very great 

extent

No basis to 

judge/NA

1. To what extent are managers and 

supervisors within your department/agency 

aware of the human capital flexibilities 

available to them? 

Fall 2001 1 2 14 7 0 0

Fall 2002 0 1 13 10 0 0

2. To what extent has the U.S. Office of 

Personnel Management (OPM) assisted 

your department/agency in using human 

capital flexibilities that are already available

to your department/agency? 

Fall 2001 1 5 9 6 3 0

Fall 2002 2 6 9 4 3 0 

3. To what extent are you satisfied with the 

role that OPM has played in helping your 

department/agency use these available 

human capital flexibilities? 

Fall 2001 0 7 8 7 0 2

Fall 2002 2 5 9 4 3 1

4. To what extent has OPM assisted your 

department/agency in identifying additional

human capital flexibilities that could be 

authorized? 

Fall 2001 4 10 4 3 0 3

Fall 2002 4 9 5 3 1 2

5. To what extent are you satisfied with the 

role that OPM has played in helping your 

department/agency identify additional 

human capital flexibilities that could be 

authorized? 

Fall 2001 3 9 6 3 0 3

Fall 2002 5 6 4 4 2 3

6. To what extent is the time needed to fill a 

position, or “hiring time,” a problem within 

your department/agency? 

Fall 2001 0 2 7 13 2 0 

Fall 2002 0 3 8 10 3 0 

Greatly 

hindered

Somewhat 

hindered

Neither 

helped nor 

hindered

Somewhat 

helped

Greatly 

helped

No basis to 

judge/NA

7. Overall, would you say that OPM has 

helped or hindered the hiring process in 

your department/agency? 

Fall 2001 0 5 5 11 2 1

Fall 2002 2 2 9 7 3 1
Page 31 GAO-03-428 OPM's Role in Flexibilities

Appendix II

Comments from the Office of Personnel 

Management ApendxiI
Appendix II

Comments from the Office of Personnel 

Management

Page 32 GAO-03-428 OPM's Role in Flexibilities
Appendix II

Comments from the Office of Personnel 

Management

Page 33 GAO-03-428 OPM's Role in Flexibilities
Page 34 GAO-03-428 OPM's Role in Flexibilities

Appendix III

GAO Contacts and Staff Acknowledgments ApendxiI

GAO Contacts J. Christopher Mihm or Edward Stephenson, (202) 512-6806

Acknowledgments In addition to the persons above, K. Scott Derrick, Charlesetta Bailey, Tom 

Beall, Ridge Bowman, Karin Fangman, Molly K. Gleeson, Judith Kordahl, 

Shelby D. Stephan, Gary Stofko, Mike Volpe, and Scott Zuchorski made key 

contributions to this report.

(450158)
GAO’s Mission The General Accounting Office, the audit, evaluation and investigative arm of 

Congress, exists to support Congress in meeting its constitutional responsibilities 

and to help improve the performance and accountability of the federal government 

for the American people. GAO examines the use of public funds; evaluates federal 

programs and policies; and provides analyses, recommendations, and other 

assistance to help Congress make informed oversight, policy, and funding 

decisions. GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

Obtaining Copies of 

GAO Reports and 

Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older 

products. The Web site features a search engine to help you locate documents 

using key words and phrases. You can print these documents in their entirety, 

including charts and other graphics.

Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site 

daily. The list contains links to the full-text document files. To have GAO e-mail this 

list to you every afternoon, go to www.gao.gov and select “Subscribe to GAO 

Mailing Lists” under “Order GAO Products” heading.

Order by Mail or Phone The first copy of each printed report is free. Additional copies are $2 each. A check 

or money order should be made out to the Superintendent of Documents. GAO 

also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a single 

address are discounted 25 percent. Orders should be sent to:

U.S. General Accounting Office

441 G Street NW, Room LM

Washington, D.C. 20548

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Public Affairs Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800

U.S. General Accounting Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Service Requested

Presorted Standard

Postage & Fees Paid

GAO

Permit No. GI00